The preamble to the proposal begins by stating, “Assessing benefits and costs of alternative regulatory options through analysis helps agency policymakers arrive at sound regulatory decisions. There is nothing wrong with most of them individually, and some of them (such as the proposal to correct benefits estimates for income discrepancies) are downright useful, but I worry that collectively they will make benefit-cost analysis so complicated and esoteric that OIRA will lose its audiences and undermine its influence. They read like they were written by a graduate student in economics who was asked to review the developing literature on benefit-cost analysis over the last few decades. It means the accumulation of inelegant fixes to address previously unanticipated problems that arise in the course of experience, which computer programmers call “kludges.” But at some point, the cure is worse than the disease and the whole system becomes less effective because it is so complicated that no one understands it anymore, except perhaps an expert who focuses on that particular sub-field of knowledge.Īs a former political appointee at EPA who served as liaison to OIRA and has been a long-time supporter of the OIRA review process, that’s my concern about the proposals to “modernize” Circular A-4.
This tendency has been called “Kludgeocracy,” an awkward term drawn from computer programming. On the other hand, government programs, including OIRA’s Circular A-4, have an innate tendency to become more and more complicated over time. That aphorism captures the fundamental human predicament of limited cognitive capacity, an often overlooked point for which my favorite polymath, Herbert Simon, won the Nobel prize in economics in 1978. “The perfect is the enemy of the good,” a wise old saying cautions. For other posts in the series, click here.
*This post is part of a symposium on Modernizing Regulatory Review.
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